HO CHI MINH CITY — Vietnam has received its first shipment of U.S. wheat after the southeast Asian nation eliminated its 3% import tariff.

The shipment arrived Feb. 6 at Ho Chi Minh City carrying more than 68,350 metric tons of soft white and hard red spring wheat grown in the Pacific Northwest and the Northern Plains.

“It’s certainly significant because of the reduction in the cost of U.S. wheat moving into Vietnam,” said Steve Mercer, vice president of communications for U.S. Wheat Associates. “With prices generally high, if you can reduce the landed cost of imported wheat by even 3%, it matters, it really does.”

U.S. Wheat is the overseas marketing arm for the industry.

Soft white wheat is particularly popular in Vietnam, Mercer said in a press statement.

Last year, Vietnam purchased 157,000 metric tons of white wheat, said Glen Squires, CEO of the Washington Grain Commission.

“Tremendous news,” Squires said. “The lowering of the tariff is a great sign for increased movement of U.S. wheat, Pacific Northwest wheat into Vietnam.”

“With the import tariff reduced to zero, the Vietnamese buyer saved almost $1 million on this vessel load of U.S. wheat alone,” Robert Hanson, agricultural counselor for USDA Foreign Agricultural Service, based in Hanoi, said. “We thank the Vietnam government for ending the tariff, a decision that will hold the line on food costs and help make U.S. wheat more competitive in Vietnam’s growing market.”

It’s not certain when additional shipments might occur, Mercer said.

“Does this mean it’s going to happen again? We couldn’t possibly say,” he said.

U.S. wheat exports are behind this year both in Vietnam and overall, Mercer said, due to higher prices caused by the short crop that was a result of the drought.

Vietnam imports an average of about 4 million metric tons of wheat per year. Australia and Canada are large wheat suppliers to Vietnam and had duty-free access to Vietnam for many years under regional trade agreements.

Vietnam first reduced the U.S. wheat import tariff from 5% to 3% in July 2020. Talks continued until Vietnam published the final decree, and USDA and U.S. Trade Representative Katherine Tai announced in November 2021 that the tariff would be eliminated.

Even with the tariff, Vietnamese millers had doubled the volume of U.S. wheat to more than 520,000 metric tons between 2015 and 2021.

In addition to soft white and hard red spring wheat, Vietnam imported U.S. hard red winter and soft red winter wheat in 2021. That returned about $130 million to U.S. farmers and the wheat supply industry, according to U.S. Wheat.

“Vietnam has tremendous growth potential,” Squires said, pointing to a growing population and higher incomes. “The lack of tariffs essentially puts us on an equal playing field with our competitors. The tariff-free situation could easily sharply increase our exports there.”

“Eliminating the U.S. wheat import tariff came at the right time for Vietnam given the run up in U.S. and global wheat prices,” Vince Peterson, U.S. Wheat president, stated in the press release. “We will keep helping Vietnamese customers gain more value with the U.S. wheat supplies needed to meet the growing demand there for better quality wheat foods.”